(Private) aviation is experiencing enormous consequences because of the outbreak of the Coronavirus. Since mid-March, several countries have closed their airspace to commercial air traffic. Worldwide, airliners are facing a difficult time. Even though national lock downs might slightly be alleviated by some countries, the aviation industry will need years to recover from this pandemic. What happens next? We take you along and answers aviation-related questions.
What is happening with the airliners?
The aviation industry shows a recognizable economic cycle over a couple of years. We have seen the effect on the industry after the 9/11 disaster. Years later, the Global Financial Crisis (GFC) starting in 2007 had a new impact on the industry. Based on data from the past, the economic cycle in aviation has a down and uptime of between 4-6 years.
Where the aviation sector was, in the beginning of 2020, initially at a financial peak, stories gradually emerged that another credit crisis was imminent. Where economic slowdowns were expected in the coming year, no one expected the virus to ignite a disastrous new economic downtime for the aviation industry. A downtime which might take years for the airliners to recover.
Most airliners have reduced their network with 80% of the normal schedule, other companies have the entire fleet aground. The longer the pandemic continues, the greater the (financial) consequences for the airliners. Airline companies that cannot rely on state aid or bank loans will undoubtedly have an extremely hard time. Companies will fall, jobs will be lost.
Will the aviation industry be different after the pandemic?
Society is changing as a result of current measures regarding the coronavirus. Measures taken such as keeping a distance, wearing face masks, and avoiding group gatherings, will have a tremendous effect on the aviation industry. Are people just as willing to board an airplane with between a hundred and three hundred other travellers? Can we organize aviation in this area in a safe manner?
The peak of air travel as we know it in January will undoubtedly not be seen for a long time. It will be years before we return to a normal situation in aviation, fully corresponding to the economic cycle. The coronavirus will need to be controlled first before passenger might even start think again of traveling somewhere. If they would want to make that step, they might look at other means of transportation first.
As pricing is currently disrupted by airliners trying to attract travellers by offering record-low prices for their flights, climate experts say that the current pandemic is perhaps an opportunity to abide climate initiatives by imposing taxes and levies on tickets, raising ticket prices. This would mean that, in economic peak times, ticket prices will be higher than before, leaving twenty-euro city trips a thing of the past.
On the other hand, people might currently be postponing their current plans for a trip until an improvement of the pandemic, which, in combination with low oil prices and countries lifting regulations, might result in a higher demand for air tickets sooner than expected (2021). However, according to the IATA, this situation is highly unlikely, and recovery will more likely be a process of more years.
What is the impact of the virus on the private aviation charter market?
Where the major commercial airlines are struggling, the demand for flying private is increasing enormously. These are golden times for those offering private charters, due to the lack of first class and business seats on regular airlines. Before the outbreak of the coronavirus, approximately 800.000 flights took place worldwide per week. The number of flights almost halved a month after the outbreak of the virus. On average, 10% of a commercial aircraft is reserved for business class passengers, which amounts to about 12 million seats per week (taking the Boeing 787 as an average), first class seats not considered. Since private jets can only fill this gap by 25 percent, the demand for private charters has skyrocketed.
Why do people choose to fly private?
Travelers are stuck abroad because of airline cancellations or limited repatriation possibilities. They can be stuck due to a local lockdown and have no prospect of repatriation. Travelers see private flying as an alternative, they want to go back to family, they want to go home.
There are also a lot of travellers that choose to fly private for safety reasons, for example, mostly older people, are concerned about the risk of contamination and want to avoid busy airports or crowded airports or cabins of commercial aircraft. How do you keep a safe distance from other people on board a large airliner?
Private flying offers a solution for this uncertainty. In addition to the known luxury and comfort of private flying, customers can bypass crowded airport terminals and arrive twenty minutes before departure. Upon arrival, the passenger will be outside the airport within five minutes, bypassing busy areas of the airport again.
An interesting option is traveling together with others on board a private jet flight. This way travellers can share the costs, but passengers do have their own personal space on board. ENVOY searches for fellow travellers and makes the flight possible.
Can private jets still fly to everywhere?
Where commercial airlines cannot fly, private charter operators are currently still able to fly, provided they have received authorization from the country to land and the country has not closed its entire airspace. But even then, traveling on a private jet might still be possible, through diplomatic channels.
At the same time, these operators still must consider the current restrictions in the country. For example, passengers often must come from the country they want to fly to (nationality or residence permit), a short city trip to another country is out of the question, flights are purely allowed for repatriation purposes only.
Time will tell how the virus will react the coming months, how long restrictions on the coronavirus will be upheld, and how severe the impact will be on the (private) aviation industry. What happens next? Despite all the uncertainties, it is certain that the aviation industry will face difficult challenges in the time ahead.